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Laying the litigation groundwork: a US perspective

On April 21 2016 in New York, Trademark Litigation: Practical Strategies will provide an interactive forum in which experienced litigators can share best practices and corporate counsel can quiz industry experts on decision making. In advance of the conference, two trademark experts have given us the inside track on the foundations that underpin litigation success.

When considering action, Timothy J Kelly, chair of the trademark practice group at Fitzpatrick, Cella, Harper & Scinto, first stresses that a measured approach is critical, stating that “while the facts relating to a potential trademark infringement claim can often incite businesses to look for a mechanism for immediate redress, the urge to act quickly needs to be tempered by the need to properly evaluate case strengths, weaknesses, and available options”.

As success will ultimately depend on the foundations that are laid from outset, Kelly therefore urges companies to turn the gaze inwards before swinging into action: “When considering relief the trademark owner/plaintiff needs to first ensure that its own house is in order – that the trademarks to be asserted are in good standing and not vulnerable to challenge. Next (or concurrently) the strength of the trademark owner’s position must be objectively evaluated. Issues such as the strength of the mark(s) to be asserted, the similarities between the plaintiff’s mark(s) and the mark used by the accused infringer, the similarities between the parties’ products, channels of trade and target consumers, and the presence or absence of any actual confusion, among other things, all need to be considered in advance of commencing action.”

Of course, this is all complicated by the need to act in a timely manner, creating a delicate balancing act for corporate counsel – especially when immediate relief is desired. Kelly acknowledges: “When seeking immediate relief in the form of an ex parte seizure and temporary restraining order or a preliminary injunction, the plaintiff must thoroughly assess its potential for success in this regard by, for example, investigating when the alleged infringement became known. However, delays of any significance can undermine a claim that immediate relief is necessary.”

The preliminary injunction is a critical tool in the litigator’s armoury, with David Hosp, a principal and trial lawyer at Fish & Richardson, observing that “as a practical matter, as often as not, trademark cases are decided at the preliminary injunction phase. If a preliminary injunction is granted, the defendant must cease using the mark in question pending a trial that may not take place for a year or more later, and the practicalities of re-launching a dormant brand at that point (assuming the defence is ultimately successful) are not necessarily attractive”.

While this can make preliminary injunctions a priority, their utilisation is complicated by the changing judicial treatment of irreparable harm. For many years such harm was presumed in cases in which a rights holder could establish a likelihood of success on trademark infringement claims. However, in 2013 the US Court of Appeals for the Ninth Circuit weighed in on the applicability of the Supreme Court’s patent-based ruling in eBay Inc v MercExchange to preliminary injunctions in the trademark context. Writing for World Trademark Review at the time of the decision, Kelly explained that the Ninth Circuit made clear that a party seeking a preliminary injunction in a trademark matter will need to establish - by way of demonstrable proof - that irreparable harm will result if such relief is not granted: “In so doing, the court put to rest the presumption of irreparable harm that has traditionally accompanied a finding that an alleged infringer’s trademark is likely to cause confusion.”

This increased the stakes for plaintiffs, with Hosp noting that, “because damages can often be difficult to prove, if the preliminary injunction is denied, plaintiffs can lose the will to fight and may be far more willing to come to some compromise settlement”. Again, then, a thoughtful approach to preparation is key. He adds: “Significant thought must be given to the evidence that a plaintiff (or a defendant) can offer on key issues of trademark validity, ownership, and likelihood of confusion even before the complaint has been filed or discovery has begun. Evidence of consumer surveys and actual confusion should be gathered even before filing, and thought should be given to what requests for expedited discovery will be needed to succeed at this initial stage because, notwithstanding the ‘preliminary’ label, this phase can often determine the ultimate success or failure of the case for the client”.

Another consideration for brand owners is the cost involved in litigation, and the potential impact on the business as it rumbles on. Last year, luxury fashion brand Belstaff grabbed media headlines after the US District Court for the Southern District of New York ordered counterfeiters to pay more than $42 million in damages, and hand over 676 offending websites, to the company. However, such awards are the exception, not the rule, and Kelly observes that “trademark cases in the United States are often finally resolved – whether by settlement or even by judicial decision – without an award of damages or attorneys’ fees. The trademark owner deciding on whether to pursue legal action must take this into account; litigation is typically not a money-making proposition as the ultimate relief for the successful plaintiff is frequently limited to an injunction”.

As to the wider considerations that come into play, he concludes: “A hard-fought litigation takes a toll on a business irrespective of the outcome and not only from a monetary perspective. Litigation takes time; often a year or more to complete. Executives will be required to take time away from their day-to-day revenue-generating activities for witness preparation sessions and depositions; documents – perhaps sensitive ones – will have to be gathered and produced to counsel for the other side.”

In many instances, of course, litigation is unavoidable and careful planning through every stage of the process is key. The Trademark Litigation: Practical Strategies conference will therefore provide attendees with a high-level, interactive forum in which to discuss cutting-edge strategies to maximise their chances of success in legal actions.

In addition to Kelly and Hosp, confirmed speakers to date include Jessica Cardon, SVP and general counsel at Camuto Group, Patrick M Flaherty, assistant general counsel at Verizon, Kat Johnston, assistant general counsel, IP, at Facebook and Maximilien Yaouanc, senior counsel at Philip Morris International.

Delegates registering for the conference by February 16 can do so at the discounted rate of $545, a saving of $250 on the full delegate rate of $795. Simply fill out the online registration form and use the code TLSEBE5.

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